Why Intel (INTC) Shares Are Climbing Today

Intel (INTC, Financial) shares surged by about 8% on Monday morning trading as market confidence grew following the appointment of new chief executive Lip-Bu Tan. The move comes amid expectations of a comprehensive turnaround.

Tan, a former Intel board member and previous CEO of Cadence Design Systems, is set to streamline operations and enhance chip-manufacturing efficiency. His strategy includes reducing middle management layers and developing advanced semiconductors to support artificial intelligence servers.

Investors are encouraged by early signals that the company could introduce a fresh AI chip architecture by 2027, with plans for iterative improvements thereafter. This initiative follows a challenging period for the company, which suffered a steep decline exceeding 40% over the past year and a significant $13.4 billion loss in its foundry division.

Tan's vision to revive Intel's competitiveness would imply that cost cutting measures that culminated in the layoff of nearly 15,000 jobs have failed. Industry watchers were expecting further details on the strategic overhaul and the company would not comment further. Details of this turnaround are expected to come in subsequent sessions.